Exclusions from Overtime
The federal Fair Labor Standards Act (the "Act") requires that employers pay employees overtime, in the amount of at least one and one-half times the employee's regular rate, for any work that the individual works over forty hours in one workweek. Generally, this obligation applies to any and all work an employee performs for his employer, assuming of course, that the employee is not otherwise exempt from the overtime requirements of the Act.
The Act includes an exception providing for the exclusion of certain hours worked by employees of a state or local governmental agency, including a school district or community college, from the calculation of overtime due such employees. Specifically, section 207(p)(2) of the Act provides that if a state or local governmental employee voluntarily undertakes, on an occasional or sporadic basis, part-time employment for the public agency which is in a different capacity from any capacity in which the employee is regularly employed, the hours such employee performed the different employment shall be excluded in the calculation of the hours for which the employee is entitled to overtime. It is not uncommon for school districts or community college districts to allow non-exempt employees (i.e., secretaries, teacher aides, etc.) to perform extra-duty activities (e.g, videotaping a graduation ceremony, scorekeeping at a sports event, etc.) on an occasional and sporadic basis for a pre-determined hourly wage rate or stipend.
In order for hours worked by a non-exempt employee performing an extra-duty activity to be excluded from hours calculated for purposes of overtime, each of the following three conditions must be satisfied:
1) The employee's performance of an activity must be completely voluntary. Although an employer may suggest or request an employee to perform an extra-duty activity, the employee must be free to refuse to perform such work without sanction and without being required to explain or justify the decision;
2) The employee's performance of the activity must be "occasional and sporadic" and on a part-time basis. The term "occasional and sporadic" means infrequent, irregular or occurring in scattered instances. Although an activity does not necessarily fail to be occasional merely because it recurs, an employee's recurring performance of a particular extra-duty activity must be carefully evaluated; and
3) The employee's performance of the extra-duty activity must be in a different capacity from any capacity in which the employee is regularly employed. In other words, the extra-duty activity must not fall in the same general occupational category as the employee's regular employment.
RSNL&T recently requested and received from the Director of the Chicago District Office of the U.S. Department of Labor, Wages and Hours Division an administrative opinion regarding the applicability of the "occasional and sporadic" exclusion. The Director's opinion to RSNL&T was the first time that the Chicago District Office has had occasion to interpret this provision of the Act. Although it is not binding, the opinion provides much needed guidance on the issue. The following are hypothetical scenarios demonstrating the applicability of section 207(p)(2):
Hours Worked Not Subject to Overtime
Hours worked by a teacher aide voluntarily taking tickets at all four of the school's home football games are not required to be included in the calculation to determine overtime due the employee.
Hours worked by a secretary voluntarily taking tickets at all of the school's four football games, three of six home basketball games, and three of five home baseball games, are not required to be included in the calculation to determine overtime due the employee.<
Hours worked by a computer aide who volunteers to tape the school's graduation ceremony are not required to be included in the calculation to determine overtime due the employee.
Hours Worked Subject to Overtime
Hours worked by a custodian who volunteers as the girls' head soccer coach are required to be included in the calculation of overtime due the employee.
Hours worked by a teacher aide directing one of the school's four student theatrical productions are required to be included in the calculation of overtime due the employee.
Hours worked by a security employee chaperoning at a sporting event for the purpose of providing security are required to be included in the calculation of overtime due the employee.
The applicability of section 207(p)(2) of the Act is necessarily very fact specific. Therefore, in order to ensure its compliance with the overtime requirements of the Act and secure the maximum benefit from section 207(p)(2), a school district or community college should 1) evaluate the method by which it assigns employees to perform extra-duty activities, and 2) prior to assigning an employee to perform a particular extra-duty activity, assess the nature of the activity in comparison to the employee's regular employment.